Australian Defence Minister Stephen Smith has directly contradicted claims by Afghanistan's president Hamid Karzai that a deadly Australian raid on suspected insurgents was carried out without proper approvals.

Two men - identified by the Afghan government as 70-year-old imam Haji Raz Mohammad and his 30-year-old son Abdul Jalil - were killed during the raid, which was carried out as part of the search for a rogue Afghan soldier who shot dead three Australians last week.

Twelve other people were detained during Friday night's raid in Uruzgan province, although 11 have since been released.

Mr Karzai has issued a statement strongly condemning the deaths, describing Australia's actions as a "unilateral military operation" that was carried out "without any prior coordination or approval of the provincial authorities".

"The President condemns the operation as a breach of the Memorandum of Understanding signed between Afghanistan and NATO on the special military operations," the Afghan government statement says.

But Mr Smith has strongly rejected the accusations, saying the partnered raid was fully authorised by the Uruzgan chief of police and the local governor.

Mr Smith said the raid involved 60 Australian Defence Force personnel and 80 Afghan National Army soldiers, and the two men who were killed have been confirmed as insurgents by both Australian and Afghan sources.

"The statement which has been issued by president Karzai's palace over the weekend in Kabul that this operation was not authorised is wrong," Mr Smith told reporters in Perth this morning.

"That is not factually correct, and this point has been made strongly by Australia's ambassador to Afghanistan to palace and presidential officials."

The raid was part of a wider search for rogue Afghan soldier Hek Matullah, who killed three Australians in a so-called green on blue attack last week.

Lance Corporal Stjepan Milosevic, Sapper James Martin and Private Robert Poate were shot dead, and two other Australians were wounded, when Matullah turned his gun on them at a patrol base in Uruzgan province last Wednesday.

The shooting has heightened concerns among coalition forces about the threat of insider attacks, and has prompted the International Security Assistance Force (ISAF) to suspend training for 1,000 Afghan Local Police recruits.

ISAF says the move is a "precautionary measure" that will allow for an intensive re-vetting process to take place for the 16,300 current members of the local police force.

Australian troops are not involved in training Afghan police, and so are not affected by the suspension.

The 11,000 members of the recently inaugurated Afghan National Army Special Operations Division are also having their vetting status checked, but are continuing to carry out their duties.

Mr Smith says that means partnered operations between Australian and Afghan forces will continue.

Matullah is still at large but is being hunted by Coalition and Afghan troops.

A suspected insurgent leader who is accused of helping him evade the manhunt was captured during the raid.

In a statement posted online, the International Security Assistance Force said: "The insurgent leader who was detained by the combined Afghan-Coalition operation in Uruzgan early on Saturday morning is confirmed to be an "IED emplacer" and was previously involved in kidnapping, murder and attacks on Afghan National Security Forces".

"At the time of his capture, he was attempting to support and move the insider threat shooter who killed three Australian soldiers and wounded two on Aug[ust] 29."